Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/203509
Authors: 
March, Christoph
Sahm, Marco
Year of Publication: 
2019
Series/Report no.: 
Beiträge zur Jahrestagung des Vereins für Socialpolitik 2019: 30 Jahre Mauerfall - Demokratie und Marktwirtschaft - Session: Experimental Economics I No. A06-V2
Abstract: 
We investigate overlapping contests in multi-divisional organizations in which an individual's effort simultaneously determines the outcome of several contests on different hierarchical levels. We show that individuals in larger units are disadvantaged in the grand (organization-wide) contest for two reasons: First, the incentive to freeride is larger in inter-divisional contests. Second, competition in the intra-divisional contest is fiercer. Both effects lower the marginal utility of effort provision. We test our model in a laboratory experiment and confirm its main predictions. Our results have important consequences for the provision of incentives in organizations and the design of sports competitions.
Subjects: 
Contest
Rent-seeking
Hierarchy
Teams
Experiment
JEL: 
C72
C92
D72
Document Type: 
Conference Paper

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